Seller Starts a Competing Business After an M&A Deal in Turkey: Injunction and Compensation Options – 2026 Updated Guide

Learn how foreign buyers can seek injunctions, compensation, contractual penalties, and other remedies when a seller starts a competing business after an M&A transaction in Turkey.

When a seller establishes or joins a competing business after selling a company in Turkey, the buyer may face the loss of customers, employees, confidential information, goodwill, and market share. Whether the buyer can obtain an injunction or claim compensation depends primarily on the share purchase agreement, the scope of any non-compete clause, the seller’s conduct, and the evidence available.

A seller is not automatically prohibited from competing merely because an M&A transaction has been completed. However, competition may become unlawful when it violates a valid contractual restriction, misuses confidential information, solicits protected customers or employees, diverts business opportunities, or constitutes unfair competition.

Is the Seller Allowed to Compete After the Sale?

The first question is whether the transaction included a post-closing non-compete obligation. In many Turkish M&A transactions, the seller agrees not to establish, manage, finance, advise, or work for a competing business for a specified period.

The clause may also define:

• The prohibited business activities;
• The geographic territory;
• The duration of the restriction;
• The customers or market segments covered;
• Prohibited contact with employees and customers;
• The use of trade secrets and company data;
• Contractual penalties for breach.

A non-compete clause that is too broad, indefinite, or disproportionate may be challenged. Courts generally examine whether the restriction protects a legitimate commercial interest and whether it is reasonably limited in time, territory, and subject matter.

The buyer should therefore review the entire share purchase agreement, disclosure schedules, side letters, employment agreements, confidentiality undertakings, and transaction documents.

When Can the Buyer Seek an Injunction?

An injunction may be considered when the seller’s continuing conduct creates an immediate and serious risk of commercial harm. The buyer may ask the competent court for interim protection while the main lawsuit is pending or, depending on the circumstances, before filing the main claim.

Possible requests may include:

• Preventing the seller from using confidential company information;
• Stopping the use of customer lists, pricing data, or trade secrets;
• Preventing the seller from presenting itself as connected with the sold company;
• Restricting direct solicitation of protected customers or employees;
• Preventing the transfer or destruction of relevant electronic evidence;
• Requiring the seller to stop specific activities covered by the non-compete clause.

The buyer must generally show a prima facie contractual or legal right, an urgent risk of harm, and a connection between the requested measure and the alleged breach. A court is unlikely to grant a vague request that completely prevents a person from earning a living or operating in an unrelated sector.

For this reason, an injunction application should identify the exact conduct to be stopped. A narrowly drafted request is often more persuasive than a general demand to “prohibit competition.”

Can the Buyer Claim Compensation?

Yes. If the seller breaches the M&A agreement or causes legally compensable harm, the buyer may seek damages. Depending on the facts, the claim may include:

• Lost profits;
• Loss of customers;
• Reduction in company value;
• Costs of replacing employees or customers;
• Expenses incurred to investigate the breach;
• Costs of protecting confidential information;
• Damage to commercial reputation;
• Contractual penalties;
• Other foreseeable losses caused by the breach.

The buyer must usually establish the breach, the actual loss, causation, and the amount claimed. The seller’s establishment of a new company alone may not be enough. The buyer should demonstrate how customers, employees, revenue, opportunities, or confidential information were diverted.

If the agreement contains a contractual penalty, the buyer may have a stronger position. Nevertheless, the enforceability and amount of the penalty may depend on the wording of the agreement, the parties’ commercial relationship, the seriousness of the breach, and applicable judicial assessment.

The buyer should also check whether the SPA contains a liability cap, claim notice procedure, time limitation, basket, deductible, exclusive remedy clause, or arbitration provision.

What If There Is No Non-Compete Clause?

The absence of an express non-compete clause does not necessarily end the buyer’s legal options. Additional claims may arise where the seller:

• Uses confidential information obtained before closing;
• Copies the company’s customer database;
• Transfers business opportunities belonging to the acquired company;
• Uses trade secrets or internal pricing information;
• Makes misleading statements about the acquired business;
• Solicits customers through information received as a former owner;
• Encourages employees to leave by using confidential company information;
• Diverts contracts to a related or newly established company.

Depending on the evidence, the buyer may consider contractual liability, unfair competition claims, confidentiality claims, trade secret protection, or compensation proceedings.

The legal theory must match the facts. A seller may compete in the general market, but may not be entitled to exploit confidential information or deliberately divert the goodwill that the buyer paid to acquire.

Competition Through a Related Company

A common structure involves the seller establishing a new company in the name of a relative, former manager, business partner, or related entity. The new company may then approach the acquired company’s customers or employees.

In such cases, the buyer should investigate:

• Common directors, shareholders, managers, or advisers;
• Similar trade names, websites, branding, or marketing materials;
• Customer transfers shortly after closing;
• Identical pricing or product descriptions;
• Movement of key employees;
• Use of company databases or CRM records;
• Communication between the seller and customers;
• Transfer of opportunities that were under negotiation before closing.

The existence of a related company does not automatically make that company liable. The buyer must establish the seller’s involvement and the legal connection between the conduct and the loss. If the new company actively participated in the breach or unfair conduct, claims may potentially be directed against additional parties.

Evidence the Buyer Should Preserve

Evidence is often the decisive issue in post-acquisition competition disputes. The buyer should preserve:

• The signed SPA and all annexes;
• Due diligence reports and data room documents;
• Seller questionnaires and disclosure schedules;
• Emails and messages exchanged before and after closing;
• Customer complaints or cancellation notices;
• Employee resignation records;
• CRM access logs;
• Pricing documents and customer lists;
• Website changes and social media announcements;
• Invoices showing diverted transactions;
• Evidence of contact between the seller and former customers;
• Server, cloud, and file-access records.

Screenshots may be useful, but the buyer should preserve original electronic records and relevant metadata whenever possible. Evidence must be obtained lawfully. Unauthorized access to accounts or systems can create separate legal risks.

Where there is a serious risk that evidence will be deleted or changed, the buyer may consider urgent evidence-preservation measures and technical examination by qualified professionals.

2026 Practical Considerations for Foreign Buyers

In 2026, many post-M&A disputes involve cloud systems, remote employees, digital customer records, encrypted messaging applications, online advertising accounts, and data exported shortly before or after closing.

Foreign buyers should pay particular attention to:

• Digital evidence stored outside Turkey;
• Cross-border service of legal notices;
• Powers of attorney for Turkish proceedings;
• Arbitration and jurisdiction clauses;
• Personal data restrictions;
• Translation and notarization requirements;
• Enforcement of Turkish court orders abroad;
• The seller’s assets and residence outside Turkey.

A foreign buyer should not wait until the full financial loss becomes clear. Early legal analysis may help preserve evidence, protect customers, prevent further misuse of data, and determine whether an interim injunction is realistic.

Lawyer Fırat Fesih Kaya and the Fırat Fesih Kaya Law Office assist foreign investors with Turkish M&A disputes, post-closing non-compete breaches, unfair competition claims, interim measures, and compensation proceedings.

Recommended Action Plan

The buyer should generally:

1. Review the SPA and all post-closing restrictions;
2. Identify the seller’s exact competing activities;
3. Preserve digital and commercial evidence;
4. Calculate the financial impact;
5. Send a formal breach and reservation-of-rights notice;
6. Assess whether an urgent injunction is necessary;
7. File compensation, penalty, or unfair competition claims where appropriate;
8. Examine whether related companies or individuals participated in the conduct;
9. Protect customer, employee, and confidential information;
10. Check arbitration, jurisdiction, notice, and limitation provisions before commencing proceedings.

A prompt response is important because delay may increase losses and make it more difficult to prove causation.

Frequently Asked Questions (FAQ)

1. Is a seller automatically prohibited from starting a competing business after selling a Turkish company?
No. A prohibition usually depends on a valid non-compete clause or separate unlawful conduct, such as misuse of confidential information or unfair competition.

2. Can a foreign buyer obtain an injunction in Turkey?
Potentially, yes. The buyer must show an urgent risk, a plausible legal right, and a specific measure connected to the alleged breach.

3. Can the buyer stop the seller from contacting former customers?
This depends on the contract and the seller’s conduct. A restriction against targeted solicitation may be enforceable, while a general ban on ordinary market competition may be excessive.

4. What if the seller competes through another company?
The buyer should investigate the relationship between the seller and the new company. Additional claims may be possible if the new company participated in the breach or benefited from unlawful conduct.

5. What damages can the buyer claim?
Depending on the evidence, the buyer may claim lost profits, customer losses, investigation expenses, reduced company value, contractual penalties, and other proven losses.

6. Is a contractual penalty automatically payable?
Not always. The wording, validity, proportionality, breach, and other contractual conditions should be examined before making a claim.

7. What evidence is most useful in a competition dispute?
The SPA, customer-transfer evidence, emails, messages, employee records, CRM logs, invoices, website records, and proof of confidential information use may be important.

8. Can the buyer sue without proving that the company lost money?
Some contractual remedies may not require the same level of financial proof as a damages claim. However, the buyer must still establish the relevant breach and satisfy the contract’s conditions.

9. Can the buyer bring criminal proceedings against the seller?
A criminal complaint may be considered if the facts involve conduct such as theft of data, misuse of trade secrets, fraud, or another criminal offence. Criminal and civil proceedings should be assessed separately.

10. What should a foreign buyer do first?
The buyer should immediately secure the transaction documents and electronic evidence, review the non-compete and confidentiality provisions, and obtain advice from a Turkish lawyer before sending notices or filing a claim.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Post-M&A Competition Disputes

Expert legal support is essential to avoid losing valuable rights. By working with a lawyer experienced in Turkish M&A transactions, non-compete clauses, unfair competition, and compensation claims, foreign buyers can protect their commercial interests in Turkey and abroad. Fırat Fesih Kaya Law Office provides professional legal support in post-acquisition competition disputes.

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